Nigeria’s inflation soars to record high of 33.95% in May

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Nigeria’s headline inflation rate reached a new high of 33.95% in May 2024, according to the latest data released by the National Bureau of Statistics (NBS). This represents a 0.26 percentage point increase from April’s already concerning inflation rate of 33.69%.

This represents an increase of 0.26% points when compared to the April 2024 headline inflation rate, according to NBS Consumer Price Index report released on Saturday.

The data revealed that on a year-on-year basis, the headline inflation rate was 11.54% points higher compared to the rate recorded in May 2023, which was 22.41%.

This shows that the headline inflation rate (year-on-year basis) increased in the month of May 2024 when compared to May 2023.

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On the contrary, on a month-on-month basis, the headline inflation rate in May 2024 was 2.14%, which was 0.15% lower than the rate recorded in April 2024 (2.29%).

This sharp rise in inflation is causing significant hardship for many Nigerians, particularly those on low incomes. The cost of essential goods, especially food items, has been surging in recent months.

This trend is likely to continue due to several factors, including:

• Global Supply Chain Disruptions: The ongoing war in Ukraine and other global disruptions continue to impact the import and export of goods, leading to higher prices for consumers.
• Currency Depreciation: The Nigerian Naira has weakened against major currencies in recent years, making imported goods more expensive.
• Domestic Factors: Local factors like rising fuel costs and insecurity in some food-producing regions are also contributing to the inflationary pressures.

The Central Bank of Nigeria (CBN) has raised interest rates in an attempt to curb inflation. However, these measures may have a limited impact in the short term. The government may need to consider additional measures to address the underlying causes of inflation, such as boosting domestic food production and improving infrastructure.

With inflation at a 17-year high, many Nigerians are struggling to afford basic necessities. The purchasing power of their incomes has been significantly eroded, leading to a decline in living standards. This is particularly concerning for low-income households who spend a large proportion of their income on food.

The near-term outlook for inflation remains uncertain. The ongoing global economic challenges and the upcoming rainy season in Nigeria could put further pressure on food prices. The effectiveness of the CBN’s monetary policy measures and the government’s ability to address the underlying causes of inflation will be crucial in determining the future trajectory of inflation in Nigeria.